UNITED STATES v. HOSKINS

May 14, 1981

UNITED STATES OF AMERICA, PLAINTIFF,v.MICHAEL HOSKINS, DEFENDANT.

The opinion of the court was delivered by: Getzendanner, District Judge.

MEMORANDUM OPINION AND ORDER

Michael Hoskins was charged in a 6 count indictment which
included 3 felony charges under 18 U.S.C. § 201(g) (Counts 1, 3
and 5)*fn1 and 3 misdemeanor charges under 18 U.S.C. § 665(b)
(Counts 2, 4 and 6)*fn2. Counts 1 and 2 relate to a $50 bribe
Hoskins received on or about April 6, 1979. Counts 3 and 4 relate
to a $50 bribe Hoskins received on or about April 27, 1979.
Counts 5 and 6 relate to a $50 bribe Hoskins received on or about
April 27, 1979.

Mr. Hoskins pleaded guilty to each of the misdemeanor counts.
This plea established the following facts: The defendant was an
employee of the Illinois Bureau of Employment Security ("IBES"),
a department of the State of Illinois. His job was to interview
CETA job applicants, assess their eligibility, and refer eligible
applicants to CETA hiring agencies for the City of Chicago. By
threat of refusal to employ in connection with a grant and
contract of assistance under CETA, Mr. Hoskins induced three CETA
job applicants to give him $50 each on or about the dates charged
in the indictment, and he received this money knowing that it was
wrong to do so.

Mr. Hoskins next elected to be tried by the court on the felony
counts, Counts 1, 3, and 5. The plea of guilty on the misdemeanor
counts established all of the essential facts under the felony
counts except the defendant's status. Thus, all the parties
understood that the only issue to be tried was whether the
defendant was a federal public official for purposes of § 201.*fn3

Sometime prior to 1977, the City of Chicago became a prime
sponsor of a CETA-PSE (Public Service Employment) plan which was
approved by the Secretary of Labor. The statute provides for
federal grants to prime sponsors who submit CETA plans which are
approved by the Secretary of Labor. The approved CETA plan is the
plan of the prime sponsor; it is not the Secretary of Labor's
plan which is merely administered by the prime sponsor.

The eligibility requirements for persons who could participate
in any CETA-PSE plan are set forth in the statute and regulations
of the Secretary. 29 U.S.C. § 825(i). However, under CETA, the
City as prime sponsor had full responsibility for the eligibility
of those enrolled in the program. That responsibility could be
delegated by the City to a third party provided that the
Secretary of Labor approved the arrangement.*fn4

The City apparently did delegate the responsibility for
eligibility, at least with respect to Public Service Employment
jobs, to the IBES. This delegation must have been approved by the
Secretary of Labor at the time the City's CETA program plans were
approved under 29 U.S.C. § 814. Under Section 814, "The Secretary
shall, prior to approval of any plan, insure that the prime
sponsor has demonstrated a recognizable and proven method of
verifying eligibility of all participants." Section 813(a)(15) of
Title 29 specifically contemplates that the prime sponsor, in its
plan, could coordinate with local State employment security
agencies and delineate the specific responsibilities of each.

During 1977 the United States Department of Labor ("DOL")
conducted an investigation of the City's CETA-PSE program and
apparently found irregularities. In August, 1977, the City and
DOL entered into an agreement to establish a "procedure for
referring and selecting PSE participants for the City's CETA
program that will assure that CETA jobs are filled in accordance
with applicable federal statutes and regulations." (Government
Exhibit A.)

The agreement indicated that IBES was already in place as the
agency delegated by the City to determine eligibility, but the
agreement provided specific rules binding on the City regarding
the determination of eligibility. The agreement also provided for
DOL monitoring to assure adherence to the agreement and all
requirements of CETA.

This agreement probably was voluntarily entered into by the
City in order to avoid possible termination of federal funding.
It is clear under the federal statute that the Secretary, upon
making certain findings, may revoke a prime sponsor's plan and
terminate financial assistance or withhold financial assistance.
29 U.S.C. § 816. However, the remedies provided in Section 816
are the only remedies available to the Secretary during the term
of the prime sponsor's plan.*fn5 It is important to note that
Section 816(b) specifically provides that nothing in that section
"shall be deemed to reduce the responsibility and full liability
of the prime sponsors. . . .

The defendant was a state employee working for IBES. He could
be hired, fired and supervised only by IBES personnel. His salary
was paid by the State. Although the State was reimbursed for that
salary under the Wagner-Peyser Act, the defendant could look only
to the State for his salary and not to the federal government.
Mr. Hoskins' sole job was to determine eligibility of applicants
for the City's CETA-PSE program and to refer eligible applicants
to PSE jobs.

The question under 18 U.S.C. &sect; 201(a) is whether in performing
his job as a state employee Mr. Hoskins was acting "for or on
behalf of" the Secretary of Labor.*fn7 The Secretary of Labor's
function under CETA was limited to approving a prime sponsor's
plan, granting funds to the prime sponsor to implement its CETA
plan and, upon making certain findings, terminating the plan and
withholding funds. The determination of eligibility of persons
enrolled in the CETA plan was specifically the responsibility of
the prime sponsor. 29 U.S.C. § 825(i). None of the remedial
powers of the Secretary specified in 29 U.S.C. § 816 in any way
limited the responsibility of the prime sponsor. The City
delegated its responsibility to IBES and IBES performed under an
agreement with the ...

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